Frasers plays hard on $2.6b Australand takeover offer

Singapore’s
Frasers Centrepoint
has upped the ante on hedge funds and competing bidder
Stockland
which have been holding out on their $2.6 billion takeover offer for
Australand Property Group
. Frasers issued a supplementary bidder’s statement on Thursday morning asserting that its cash offer would not be extended beyond 7pm, August 7, and that it would not waive the minimum acceptance condition. Frasers’ move puts pressure on both Stockland and the hedge funds to sell their stakes in Australand Property Group as the price of Australand would likely recede on August 8 if the minimum acceptance condition is not met.

Stockland’s scrip offer would then be the only other option for hedge funds.

Stockland already stands to make an $85 million profit on its 19.9 per cent stake in Australand due to Frasers’ bid. Stockland is being advised by Merrill Lynch, Citigroup and UBS. Most of the hedge funds who have taken positions in Australand purchased their stakes via swaps and funded those purchases through the promise of receiving an accrued ­dividend under Frasers’ offer.

Frasers is being advised by Deutsche Bank and Standard Chartered Bank, while Australand is being advised by Fort Street Advisors and ­Macquarie Capital.

Rich backing

Frasers is backed by Thailand’s third-richest man, Charoen Sirivadhanabhakdi, through his company TCC Assets.

Most analysts expect Stockland will not come back with a higher bid for Australand than Frasers, and that there will be no bidding war.

Frasers’ all-cash offer values Australand at $4.48. Shares in the stock finished down 1¢ at $4.49. Frasers has received Foreign Investment Review Board approval, and has gained support from Australand directors for its fair and reasonable offer.